Financial crisis engulfs car industry

Car market in Romania is likely to dive 11.5%, down to 2006 level, said Francois Fourmont, chairman of Automobile Dacia. The decline will be triggered by global financial crisis, whose effects will spread to all economic levels.

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Fourmont: Car industry in Romania will amount to no more than 300,000 units in 2009

Car industry in Romania is likely to drop 11.5%, down to less than 300,000 units, for this year being estimated 339,000 units, said Chairman of Automobile Dacia, Francois Fourmont.

“For 2009, the market will slope downward by 11.5%, with sales of almost 300,000 units, the equivalent of 2006 sales volume,” said Fourmont.

The market’s shrinkage will be caused mainly by the grim conditions worldwide, especially the new lending regulations.

Dacia has revised downward its production target for this year, from 310,000-320,000 to 260,000 -270,000 units, according to statements of Constantin Stroe, the company’s vice-president.

Fourmont added that Dacia might shut down production in the future given the evolution of the economic climate.

Dacia plant announced last week it would shut down production in October 30, and 31 and November 13 and 14 2008, in an effort to reset the fabrication program to the market demand.

The car parts fabrication, activity of certain sectors in Mechanical Plant, of CKD center as well as car shipping will not be blocked.

Valmar: Import of used cars is likely to grip thousands of employees in the industry

The risks of massive import of used cars consist in downsizes in production segment and in new cars distribution sector (a 5% decline of the market will lead to a cutback of workforce by 7,500 employees), postponement of new investments and discouraging other possible foreign investments.

Influence of second-hand cars on new cars sale

New cars registered a 2.6% decline in first nine months down to 222,997 units, while second-hand cars segment enhanced 98.5% to 168,339 units.

“In July, second-hand cars imports skyrocketed. Used cars market soared 142% this year in July up to 36,711 units, in August increased by 72% to 29,393 units while in September the growth percentage was 95% to 26,892 cars. H1 used cars imports’ volume was exceeded in the last three months, registering 92,996 units,” said Brent Valmar, vice-president of APIA, managing director of Porsche Romania.

Merely 7% of used cars were older than ten years. Since July 1, once the modification of first registration tax regulation, the imports of cars older than 10 years climbed to 42%. Approximately 70% of used cars come from Germany.

Workforce in the industry hovers around 200,000, in production segment, import and car and car parts shipping.

Car industry in Romania has an overall turnover of over 11.5 billion euros, equivalent to approximately 9.5% of GDP.